If you were among those concerned that the major hack of Hong Kong based cryptocurrency exchange Bitfinex would be fatal for Bitcoin you can breath a little lighter today – the USD/BTC exchange rate is back above $600. The only apparent reason for the rise is a push from speculators expecting devaluation of Chinese yuan.
Before about $65 million in Bitcoin were revealed to be stolen from Bitfinex, prices hovered around $640, so there is still ground for the exchange rate to recover. However, the $600 benchmark is a strong indicator for a rebound considering that it reached as low as $480 overnight before recovering to $540 levels shortly following the publication of the incident.
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Perhaps helping recover some credibility in the security of the Bitcoin ecosystem and especially exchanges (that are constantly battling cyber attacks not always successfully) is Bitfinex’s announcement on September 1st regarding the redemption of 1.1812% of outstanding BFX tokens. While it might be just a very small fraction of affected accounts, Bitfinex promises to continue to press forward and retire BFX tokens through equity conversion, raising new capital through equity financing, operating profits, and prudent reductions in contingent liability reserves.
Commenting on the trends behind the trading, Charles Hayter, the CEO of CryptoCompare.com, explains: “Traders are placing bets for further yuan devaluation at the end of the G20 talks. Although volumes haven’t increased the premia of Asian Markets as speculators pile in has been driving the price. Bitcoin Yuan markets are maintaining a 1% premium on average to the USD/BTC markets.”